Octopus Energy Group, Britain's largest energy supplier has transformed the energy sector through innovative use of artificial intelligence and data analytics. What started as a vision to modernize an industry running on decades-old technology has evolved into a digital transformation that's reshaping both customer service and grid management. Greg shares how data insights from the company’s enterprise software platform has contributed to an energy revolution in the UKand is set for global expansion.
Jackson's journey into the energy sector began with a frustrating realization. After building enterprise software for various industries, he and his co-founders discovered a troubling pattern: most companies failed to extract real value from their technology transformations. Projects consistently ran over budget and behind schedule, often leaving businesses fundamentally unchanged.
"We came up with a new model for enterprise software, and we decided which sector of the world could we most transform with this," Jackson explained. "Utilities were our first thought. It's a $3 trillion sector, and it's running on mainframes and 50-year-old software."
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The response from traditional utilities was telling. About half dismissed their ideas entirely, while the other half expressed interest but insisted someone else should take the risk of going first. This prompted Jackson's team to take an unprecedented approach: they would simultaneously build Octopus as an energy company while developing Kraken.The proprietary technology platform woulddemonstrate what a digital native technology utility could achieve harnessing the power of big data.
Kraken lies at the heart of Octopus Energy's success.A single platform that integrates everything from meter readings to customer communications, financial transactions, statements and billing. This unified approach represents a stark departure from the fragmented systems typical in the energy sector.
The impact on customer service has been remarkable. Octopus Energy now holds more five-star reviews on Trustpilot than any other company in the UK across all sectors,and is the only energy company rated above average by its customers.
Octopus Energy's embrace of AI for customer service began in earnest following the November 2022 release of ChatGPT. By January 2023, they had implemented AI customer service for a small percentage of customers. By May 2023, nearly half of all customer communication’s direct support was being aided by artificial intelligence.
The results surprised even Jackson's team. While operations staff initially expressed concerns about AI accuracy, customer satisfaction data revealed a striking reality: "The AI got a 65% satisfaction rating, while our brilliant team got 55%, so the AI is working," Jackson revealed.
Processing the massive amounts of data required for modern energy management demands sophisticated AI systems. Octopus Energy uses artificial intelligence to create forecasts for every generating point and smart meter, updated continuously for up to two years in advance.
This capability becomes crucial when dealing with renewable energy's inherent variability and intermittency. Rather than trying to force wind and solar power into traditional "rectangular" output patterns, Jackson advocates embracing their natural fluctuations.
"When it is windy and sunny, you've got an abundant resource with no input cost," he explained. "If we can use as much of our electricity as possible at times when it's windy and sunny, then not only is electricity greener, but it's also a lot cheaper."
To illustrate the scale of their data processing capabilities, Jackson noted that Octopus Energy in the UK processes 30 times more data than Visa does globally for payments.
The practical application of AI-driven energy management extends directly to consumers through smart tariffs. It’s worth noting that not so long ago electric vehicles were considered luxury items, however today they are rapidly becoming mainstream, with price parity to petrol cars and second hand electric vehicles often cheaper than their petrol equivalents.
For families with electric vehicles and home charging capabilities, AI can optimize charging schedules based on grid conditions and renewable energy availability. Smart charging managed through the Octopus app means that drivers can benefit from electricity up to six times cheaper per mile than petrol.
The concept extends beyond vehicles to heat pumps and home heating systems. Since average homes can store heat for several hours, AI can schedule heating during off-peak times when renewable energy is abundant, dramatically reducing costs while maintaining comfort.
Jackson envisions that homes equipped with solar panels, batteries, heat pumps, and smart hot water heaters, all optimized through AI, have the potential to eliminate energy bills entirely.
As the company continues its global expansion, Jackson explains why international expansion often trips up technology companies.Theyoften hard-code solutions for specific markets, resulting in different solutions and technology stacks for each country.
Jackson advocates for a different approach "Fundamentally the laws of physics, the laws of economics, and actually humans are the same everywhere," therefore when building technology to power an enterprise it is better to first build a platform that is abstracted from the market and then treat the market as a sort of ‘adaptor’ to deliver the final 5% of the solution.
"If you do this, what you learn in Manchester, you can deliver in Missouri. What your team in Melbourne think about will be live in Munich, and that enables us to build a global company based on local learnings and developments at lightspeed"
Looking toward the future, Jackson envisions a smart energy system that operates more like the internet. He compares current energy management to "an old minicab office" with people in control rooms on the end of a telephone manually turning power plants on and off.
The future model resembles something more akin to Uber's approach: using massive amounts of data on supply, demand, and timing, combined with AI algorithms to match resources efficiently. This approach promises to be two to three times cheaper and more efficient than traditional methods.
In search of green energy solutions to help achieve net zero goals and bring energy security, Jackson believes we need to look beyond grid optimization,andembrace AI-driven innovation to focus on distributed resources.
Rather than pursuing a single "big AI brain" controlling the entire grid, Jackson advocates for distributed optimization across millions of connected devices. Electric cars, batteries at various scales, heating systems, wind turbines, and solar panels can all increase or decrease their operations based on price signals from the grid while maintaining their primary functions.
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"A heat pump's primary job is to heat the house," Jackson explained. "But by the way, while it's at it, if it optimizes based on price signals, it would be a lot cheaper."
This distributed approach promises transformation too –delivering cheaper, more abundant, and more secure energy through intelligent coordination rather than centralized control.
As the energy sector continues its digital transformation, Octopus Energy's experience demonstrates that the convergence of AI, renewable energy, and customer-centric design is already delivering measurable results for millions of customers while paving the way for a more sustainable energy future. The company has emerged as a global trailblazer in the quest for achieving Net Zero and helping the world transition to renewable energy.
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